The ASEAN region is booming, and UK businesses are taking notice. With ten member countries and a fast-growing economy, ASEAN offers exciting opportunities for companies looking to expand. But to succeed in these markets, you need a supply chain that’s up to the task.
At SLG Logistics, we specialise in shipping goods to and from ASEAN countries, including Brunei, Cambodia, and Vietnam. We have many years of experience supporting UK businesses in optimising their supply chains for ASEAN markets and achieving success across this region.
UK-ASEAN Trade: A Growing Partnership
ASEAN is becoming increasingly important for UK trade. In 2022, the Foreign & Commonwealth Office reported that the ten ASEAN countries had a combined GDP of £2.8 trillion, similar to the world’s fifth-largest economy. Trade between the UK and ASEAN countries amounted to £46.5 billion in the year up to Q4 2022, with UK exports at £23 billion. This growth means more opportunities for UK businesses to sell their products and services, making it an ideal time to start trading there or focus on supply chain optimisation if you’re already involved.
Looking ahead, there’s room for even more growth. ASEAN countries need to spend about £82 billion a year on infrastructure, which is much more than they’re spending now. This creates opportunities for UK businesses in construction, engineering, and related services.
At SLG Logistics, we know that taking advantage of these opportunities isn’t just about finding new markets. You also need a reliable way to get your products to ASEAN countries and to be able to adapt as these markets evolve.
Get Familiar with Your Target ASEAN Markets
If you’re exploring diversifying into new regions, including ASEAN countries, laying the groundwork to understand the market will help you make the right decisions to manage your global supply chain.
It’s important to remember that ASEAN is not a single market. Each of the ten member countries has its own unique strengths and specialities, which means there’s potential for success across many different sectors and business types. However, it also means optimising your supply chain for the ASEAN markets requires extensive research and strategic planning.
Indonesia, for example, is the largest economy in ASEAN, with a population of over 270 million. It’s a major market for consumer goods and has a growing middle class. Singapore, by contrast, is much smaller but serves as a financial and logistics hub for the entire region. These differences matter when it comes to supply chain management. Shipping to bustling port cities like Singapore or Kuala Lumpur is very different from reaching inland areas in countries like Laos or Cambodia. Each route has its own set of rules, infrastructure challenges, and local customs to navigate.
Key Research Topics for Each Market
Jumping to conclusions about each market or assuming all the ASEAN markets are the same is a surefire way to hamper the success of your supply chain. To make the most of ASEAN’s diverse markets, your supply chain operations must be agile and efficient.
We recommend spending time researching each market’s infrastructure, regulations, and local links, as this information will help optimise your supply chain.
Infrastructure
ASEAN’s infrastructure is rapidly developing, but it varies across the region. Major cities like Bangkok and Jakarta boast excellent ports and logistics facilities. In other areas, you might encounter less developed roads or ports. We can support you in creating a flexible supply chain strategy to help you navigate these differences seamlessly.
Regulations
Each ASEAN country has its own set of trade rules and customs clearance procedures. Understanding these regulations is necessary for avoiding delays and unexpected costs. At SLG Logistics, we stay up-to-date with the latest requirements in each country, helping your shipments move smoothly across borders.
Local Partners
Do you have strong relationships with local partners? Having strong local connections can offer valuable insights into local markets, help navigate cultural differences, and provide on-the-ground support. We have a network of trusted partners across ASEAN, ready to support your business needs.
Strategies to Improve Your Supply Chain Network in Southeast Asia
So, what can you do to optimise your supply chain for ASEAN markets?
Diversify Your Routes
Mixing up your shipping methods can help you save money and avoid problems in ASEAN markets. For example, you send big shipments by sea freight to main ports but use air freight for urgent deliveries to harder-to-reach areas.
You might also look at options like sending goods through several countries or using trains, which are becoming a good choice for some routes. New land connections between China and Southeast Asia mean rail freight is becoming increasingly viable.
The COVID-19 pandemic exposed how fragile international supply chains can be, making it clear that businesses need to plan for disruptions and manage risks when dealing with global partners. This is especially important in Southeast Asia, where climate change is leading to more floods and severe weather. These events can damage infrastructure, disrupt transport, and halt manufacturing.
By using different ways to move your goods, you can make your supply chain more flexible and cost-effective. This approach helps you handle changes in the market more easily, keeps your business running smoothly, and makes sure you are better prepared for unexpected disruptions.
Make the Most of Digital Tools
Knowledge is power. Smart technology allows you to gain supply chain visibility quickly, address supply chain challenges in real-time, and make strategic decisions.
Automated technology allows you to track shipments, manage stock levels, and analyse real-time data from your smartphone, providing constant oversight of your supply chain. This technology can also enhance your forecasts and feed into your marketing efforts, ensuring customers receive accurate tracking information, which improves their experience as well.
Build Flexibility into Your Network
ASEAN’s markets evolve rapidly, and your supply chain needs to keep pace. By building resilience and agility in your supply chain, you to adjust quickly to meet changing demands across different countries. You should explore tactics like combining long-term and short-term warehousing solutions so you can effectively manage risks and disruptions.
For example, you might have a main warehouse in a central location like Singapore, which can serve as a hub for the whole region. At the same time, you could use shorter-term storage options in other countries. This way, you can quickly respond to sudden increases in demand without committing to long-term costs.
Prioritise Sustainability
When planning how to optimise your supply chain, you should consider sustainable choices. Being green isn’t just good for the planet—it can also benefit your business. Eco-friendly brands are likely to be well-received in Southeast Asia, where recent studies suggest that 90% of consumers there are willing to spend a premium on sustainable products.
Sustainability goes beyond just supplying planet-friendly products. Many ASEAN governments will reward you for using green practices too. For example, Singapore’s Green and Sustainable Loan Scheme offers lower interest rates for eco-friendly projects, Thailand provides tax breaks for investments in energy-efficient equipment, and Indonesia has introduced tax holidays for renewable energy investments. These perks can help offset the initial costs of adopting sustainable practices in your supply chain.
Invest in Local Knowledge
Don’t overlook the value of tapping into local knowledge and market research to gain a solid understanding of your specific markets. This can help you adjust your products and delivery methods, making your business more successful in each country.
For example, in Malaysia, where many people are Muslim, making sure your products are halal (allowed by Islamic law) can open up big opportunities. In Vietnam, where many people use motorbikes, packaging your products so they’re easy to carry on a bike could increase sales.
Knowing about local holidays and festivals is also important. During the Lunar New Year, many businesses in Vietnam and Singapore slow down or close, which can affect when you can ship things. But during Ramadan in Malaysia and Indonesia, people often buy more, so you might need extra stock.
How does your global supply chain measure up?
If you are already trading in ASEAN, your starting point will be to analyse how effective your current supply chain is. You can use key performance indicators (KPIs) to work out your pain points, and where things are going well. This will help you decide whether you need to just fix elements or start over with a new shipping partner like SLG Logistics.
If you are planning a new venture into trading in ASEAN, build these KPIs into your supply chain management, so you can see how efficiently your supply chain is working.
We’d recommend keeping a close on:
- On-time delivery: Are your products reaching customers when promised?
- Inventory turnover: How quickly are you selling and replacing stock?
- Shipping costs: Are you keeping these under control?
- Customer satisfaction: Are your customers happy with your service?
Listen to Your Team and Customers
Listening to your team and customers is just as important as looking at numbers. Your team members who work with ASEAN markets daily will often notice issues or opportunities that don’t show up in the data, so it’s worth chatting with them regularly. Likewise, customer feedback about delivery times, packaging quality, and overall satisfaction can give you valuable ideas for improving your supply chain. By combining these personal insights with data analysis, you’ll get a clearer picture of your supply chain’s performance and find areas for improvement.
Making your Move in ASEAN Markets with SLG Logistics
Remember, optimising your supply chain for ASEAN markets isn’t a one-time job. It’s an ongoing process of learning, adapting, and improving. As markets change and new opportunities arise, your supply chain needs to adjust too.
At SLG Logistics, we’re here to help you navigate these challenges. Our team has years of experience in ASEAN markets and can provide the expertise you need to build a robust, efficient supply chain. Whether you’re just starting to explore ASEAN opportunities or looking to improve your existing operations, we’re ready to support you every step of the way.
Ready to take your business to ASEAN? Get in touch with us to get a quote and discuss how we can help you build a supply chain that’s ready for success in these dynamic markets.